MONTREAL – Bell Canada finished off a pair of acquisitions today that will boost both its wireless subscribers as well as its branding and distribution capabilities.
First off, the company has completed its previously announced $135 million purchase of Canadian electronics retailer The Source. Now operating independently as The Source and as La Source in Québec, the company is already selling Bell TV, and will offer Bell and Virgin Mobile wireless products exclusively in January 2010. The stores used to sell Shaw Direct (formerly Star Choice) gear, but no more.
The Source had been owned by the bankrupt U.S. retail chain Circuit City, but has been a profitable chain. Bell got a pretty good deal on this considering Circuit City paid $335 million for the Canadian firm just a few years ago.
Other Bell services such as Bell Home phone and high-speed Bell Internet will also be available at the 750-plus locations in coming months. The chain’s branding, staff, executives and other product selection (remote control cars, batteries, mp3 players, cable splitters and other gadgets) will remain.
The second deal wrapped up today is Bell Mobility’s absorption of the 50% of Virgin Mobile Canada it didn’t own, for $142 million. A new long term licensing deal means Virgin, as Bell has already announced, will become its secondary brand (think Fido, Koodo), replacing the languishing Solo.
The company also announced that Robert Blumenthal will assume the role of president of Virgin Mobile Canada, replacing Andrew Black, who launched the brand here in 2004. The Source will also stock Virgin Mobile products and services in January 2010 and the young-skewing wireless brand will also have access to Bell’s newest national 3G (third generation) wireless network, set to launch by early 2010, said the press release.
"The Virgin Mobile Canada team has built a unique wireless brand with special appeal to young Canadians and a reputation for outstanding service right across the country," said George Cope, president and CEO of Bell and BCE. "This acquisition aligns perfectly with Bell’s strategic imperative to accelerate wireless, and we look forward to assisting Virgin Mobile Canada in maximizing the network, product, global roaming and distribution advantages that come with being part of the broader Bell organization."
While Virgin Mobile Canada will access Bell’s existing and new wireless networks and share common distribution in high-traffic retail locations, the company will continue to operate independently of Bell with its own distinctive brand, customer service operations and executive leadership team.
Blumenthal is a former Telus executive (he was SVP products and services) who was most recently CEO of Digit Wireless, a Spanish firm that specialized in keypad technology.
"I’m thrilled to be joining the Virgin Mobile Canada team as we build on our rewarding relationship with Bell Mobility and begin a new one with The Source. We think Virgin Mobile’s youth-oriented brand fits very well with The Source’s focus on young and tech-savvy consumers," said Blumenthal in a release.
Bell’s licensing agreement with the Virgin Group provides it with long-term rights to the Virgin Mobile brand and ongoing support from the Virgin Group as it enhances its youth-focused brand in Canada and around the world with properties such as Virgin Festival (virginfestival.ca) and Virgin Radio, which now has a couple of stations in Canada through a separate Virgin-Astral Radio partnership.
– Greg O’Brien
